File No. PR-2017-014
Friday, June 16, 2017
Tuesday, June 20, 2017
Thursday, June 29, 2017
TABLE OF CONTENTS
IN THE MATTER OF a complaint filed pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C., 1985, c. 47 (4th Supp.).
THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
Pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal has decided not to conduct an inquiry into the complaint.
The statement of reasons will be issued at a later date.
1.Subsection 30.11(1) of the Canadian International Trade Tribunal Act provides that, subject to the Canadian International Trade Tribunal Procurement Inquiry Regulations, a potential supplier may file a complaint with the Canadian International Trade Tribunal (the Tribunal) concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint. Subsection 30.13(1) of the CITT Act provides that, subject to the Regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2) of the CITT Act, it shall decide whether to conduct an inquiry into the complaint.
2.For the reasons that follow, the Tribunal has decided not to conduct an inquiry into the complaint.
3.On June 14, 2017, FroggaBio Inc. (FroggaBio) filed a complaint with the Tribunal regarding a Regional Master Standing Offer (RMSO) (Solicitation No. ET959-172125/B) issued by the Department of Public Works and Government Services (PWGSC) on March 17, 2017, for the supply and delivery of miscellaneous laboratory supplies and consumables, and laboratory chemicals.
4.The RMSO was a retender of an earlier solicitation (Solicitation No. ET959-172125/A) issued on December 14, 2016 (hereafter “RMSO 1”). RMSO 1 required bidders to be capable of supplying at least 80 percent of the listed laboratory supplies and consumables, and laboratory chemicals. PWGSC received three bids, but none met the 80 percent requirement.
5.As a result, PWGSC lowered the bar for the RMSO at issue in this complaint. Instead of being required to supply 80 percent of the listed goods, PWGSC required bidders to be able to supply 65 percent. This mandatory requirement lies at the heart of FroggaBio’s complaint.
6.FroggaBio alleged that PWGSC lowered the 80 percent requirement of RMSO 1 to 65 percent based on the bids it received in RMSO 1. As such, it argued that the new 65 percent requirement was established so that only one bidder could comply. Furthermore, FroggaBio claimed that, in the interest of fairness, PWGSC should have set the requirement even lower than 65 percent so that many suppliers could comply, as opposed to just one. As such, FroggaBio alleged that PWGSC violated the Agreement on Internal Trade (AIT).
7.Subsection 7(1) of the Regulations sets out three conditions that must be met before the Tribunal may conduct an inquiry in respect of a complaint: (a) the complainant is a potential supplier; (b) the complaint is in respect of a designated contract; and (c) the information provided by the complainant discloses a reasonable indication that the procurement was not conducted in accordance with the applicable trade agreements.
8.Although the first two conditions are met by this complaint, the Tribunal has decided not to conduct an inquiry because there is no reasonable indication that the procurement was not conducted in accordance with the applicable trade agreements, namely, the AIT, the Agreement on Government Procurement and the North American Free Trade Agreement.
9.As indicated above, FroggaBio took issue with one of the mandatory requirements PWGSC chose to include in the RMSO. Under the RMSO, bidders could choose to bid on Stream 1 – Laboratory Supplies and Consumables and/or Stream 2 – Laboratory Chemicals. For each stream, the RMSO included a list of products to be supplied, and bidders were required to supply at least 65 percent of them.
Annex A, Appendix 1
2. While it is expected that Offerors will fully complete Appendix 1, Offerors must be able to supply a minimum of 65% or 39 of 60 items listed herein. Offerors not meeting this mandatory requirement will be considered non-responsive and will not be considered further.
Annex A, Appendix 2
2. While it is expected that Offerors will fully complete Appendix 2, Offerors must be able to supply a minimum of 65% or 13 of 20 items listed herein. Offerors not meeting this mandatory requirement will be considered non-responsive and will not be considered further.
10.FroggaBio bid on both streams. It offered to supply 32 of 60 items for Stream 1, and 5 of 20 items for Stream 2. As such, its bid was well below the mandatory requirements for both streams, and PWGSC rightly deemed it to be non-compliant.
11.A debriefing was held on June 12, 2017. During the debriefing FroggaBio learned that none of the vendors in RMSO 1 met the 80 percent requirement, while only the winning bidder met the 65 percent requirement in the RMSO at issue in the complaint. FroggaBio thus filed its complaint with the Tribunal on June 14, 2017.
12.The Tribunal has repeatedly found that the federal government has the right to define its procurement requirements in a reasonable manner. While a government institution has the right to establish the parameters of the solicitation, it does not have licence to establish conditions that are impossible to meet and/or unreasonably favour one supplier over another.
13.In this case, the Tribunal finds that PWGSC set the terms of the RMSO in a reasonable manner. The terms of the RMSO indicate that the government sought to obtain as many of its needed laboratory supplies and consumables and laboratory chemicals from one supplier as possible, in that the RMSO could thus be taken as a kind of “one-stop shopping” given the commercial reality that not every supplier would necessarily be able to supply each and every listed product. The fact that PWGSC chose to lower the requirement from 80 to 65 percent, arguably to allow more companies to meet the terms of the RMSO, does not detract from its ability to establish reasonable procurement requirements in keeping with its legitimate operational objectives.
14.The fact that PWGSC revised the terms of the solicitation so that at least one bidder could meet them suggests that the 65 percent requirement was neither unreasonable nor impossible to satisfy. Moreover, FroggaBio provided no evidence to substantiate its allegations that the lower requirement was in any way discriminatory or unfair.
15.Indeed, Section 126.96.36.199(c) of the RMSO acknowledges that a bidder need not be the manufacturer of the products supplied, only that a bidder have the right to sell the products in question in Canada. FroggaBio was not bound by its bid in RMSO 1; it could have taken measures to increase its range of offerings in order to comply with the 65 percent requirement in the RMSO at issue in this complaint. While meeting this criterion may have been more challenging for FroggaBio than for a supplier who demonstrated it could meet a 65 percent threshold in RMSO 1, the Tribunal cannot conclude on the basis of the evidence that the 65 percent threshold was discriminatory in and of itself.
16.No evidence was provided in the complaint to suggest that the 65 percent threshold was relaxed with the intention of placing FroggaBio or any other bidder at a disadvantage. Quite the contrary, the relaxation of the standard was harmonious with the objectives of the trade agreements which relate to broadening, not restricting, competition.
17.As such, the Tribunal finds that the complaint does not disclose a reasonable indication that the procurement was not carried out in accordance with the applicable trade agreements.
18.Pursuant to subsection 30.13(1) of the CITT Act, the Tribunal has decided not to conduct an inquiry into the complaint.
. R.S.C., 1985, c. 47 (4th Supp.) [CITT Act].
. S.O.R./93-602 [Regulations].
. Article 504(3)(b) of the AIT prohibits the biasing of technical specifications in favour of, or against, particular goods or services, or the suppliers of such goods or services, for the purpose of avoiding the obligations of Chapter Five.
. R.P.M. Tech Inc. v. Department of Public Works and Government Services (25 March 2015), PR-2014-040 (CITT); Inforex Inc. (24 May 2007), PR-2007-019 (CITT); FLIR Systems Ltd. (25 July 2002), PR-2001-077 (CITT); Aviva Solutions Inc. (29 April 2002), PR-2001-049 (CITT).
. Springcrest Inc. v. Department of Public Works and Government Services (21 November 2016), PR-2016-021 (CITT). See also 723186 Alberta (12 September 2011), PR-2011-028 (CITT); Inforex Inc.; FLIR Systems Ltd.; Aviva Solutions Inc.
. MD Charlton Co. Ltd. (13 May 2016), PR-2016-007 (CITT) at para. 18.
. Almon Equipment Limited v. Department of Public Works and Government Services (3 January 2012), PR-2011-023 (CITT) at para. 28.